DVD video is storming ahead but supermarkets have to play the game on day one compliance if they are to maximise sales

Four years after DVD Video was introduced to the UK, the format has finally overtaken VHS in terms of retail sales.

DVD sales grew by 111% in 2002, according to the British Video Association, fuelled by blockbusters like Harry Potter and Lord of The Rings. This growth helped the total video retail and rental business expand by 26% to almost £2.6bn, making it the biggest consumer entertainment sector, pushing it ahead of music (£2bn) for the first time.

It was in the middle of the 1990s that the supermarkets, led by Asda and Tesco, muscled in on what they saw as a potentially lucrative video market that fitted their customer profile perfectly.

By the end of this July the supermarkets’ share of retail video sales by volume was 19.6%, with 56.0% of all that trade coming from DVD - a 44% increase on the same period in 2002.

The latest full-year figures reveal that supermarkets increased their market share from 18.0% in 2001 to 21.0% in 2002 [TNS] at a time when the specialist multiples such as HMV, Virgin, MVC and Blockbuster experienced an overall fall in their share of one percentage point from 31.5% to 30.5%.

“The grocers have become extremely good at catering for their customers, which means they are strong on family, children’s and blockbuster titles. There is now a great deal of price competition in the retail sector on DVD as well as VHS,” says the BVA’s director general, Lavinia Carey.

Asda has been at the forefront of promoting DVD as a format and in August it began a complete revamp of its home entertainment category. One of the main changes was to combine the DVD and VHS formats for its instore chart to reflect the different sales volumes on each format for individual titles.

The video studios insist that the key to a
profitable video category in grocery is to focus on what they call day one compliance. This means ensuring point of sale material is in place and enough stock has been delivered to each store to take advantage of the millions of pounds of pre-release promotion funded by the studio in the weeks before a scheduled Monday morning release date.

For example, 20th Century Fox is spending £900,000 on pre-launch television advertising for one of the big Christmas releases, X-Men 2, which is out on November 10.

While pricing is the big issue in music, it is all about timing in video. If a store fails to make the most of day one or at least week one, a film’s sales potential can be lost. In quarter four there might be two or three big movie releases out on the same day and they all need to be properly supported.

More than 15 titles are released on October 20, for instance, while on Monday November 23 two key videos will be jostling for retail space, Buena Vista Home Entertainment’s Bruce Almighty and Universal Pictures’ About A Boy.